The Growing Problem of Rising Rents

A Harvard study lays bare the challenge we have housing our lower-income citizens.

A new study from the Joint Center for Housing Studies (JCHS) at Harvard University presented some unpleasant facts about life for renters in America and Massachusetts. With rent rapidly on the rise, more and more Americans are spending outrageous proportions of income on housing or being forced into homelessness. In Massachusetts, median rents have increased to $1,000. It wasn’t always this way.

â€œIn 1960, about one in four renters paid more than 30 percent of income for housing” according to the study. Today, it’s one in two. â€œBy 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million.”

The problem disproportionately affects the poor. More than 70 percent of families earning less than $15,000 a year pay more than half their income in rent, whereas less than 1 percent of families earning more than $75,000 do the same.

The problem is one of supply and demand, with construction of affordable properties lagging way behind desire for them. That’s not news in either Massachusetts or Boston where leaders have focused on increasing the rate of building for years, in the hopes that it will take the edge off the rise in rents.

One issue laid out in the study is it costs a lot to develop the kind of housing that someone making $15,000 a year can afford.

To meet the 30-percent-of-income affordability standard, they would have to find housing that costs no more than $375 a month. By comparison, the 2011 median monthly cost for housing built within the previous four years was more than $1,000. Less than 34 percent of these new units rented for less than $800, and only 5 percent for less than $400.

Given this mismatch, it is no surprise that the gap between the number of lower-income renters and the supply of affordable units continues to grow.

Another issue, locally, is that those thinking about the big policy issues statewide aren’t always in control. Affordable housing proposals often run up against local opposition. As Paul McMorrow wrote in a Boston Globe column last year:

Massachusetts struggles to turn the students it educates into workers and taxpayers because the state doesnâ€™t have any power to dictate housing policy. Cities and towns, which control the pace of new construction, only permit new housing construction in fits and starts. As a result, during the last housing boom, prices jumped twice as much in Massachusetts as they did in the rest of the country. Theyâ€™ve remained high in the bubbleâ€™s aftermath. Boston-area rents climbed steeply during the recent recession, and are now higher than theyâ€™ve ever been.

Those dynamics aren’t new. But the problem, as laid out in the Harvard study, is acute. After all, renting has long been the go-to option for those who couldn’t afford homes. But when renting becomes unaffordable, too, what’s left?